Michael Hudson Discusses Russia Sanctions Blowback on the Renegade

Yves here. Michael Hudson gives another talk on the broader implications of US sanctions against Russia for the American economy, the dollar, and China.

Originally produced by the Renegade

Ross [00:00:29] Welcome to Renegade Inc. Whatever the outcome in Ukraine, one thing is for sure the economic reverberations will be felt by everyone for years to come as the world divides between the West and a rapidly reshaping Eurasia.

Ross [00:00:49] Michael Hudson, always a pleasure to have you on the program, welcome to Renegade Inc.

Michael Hudson [00:00:53]Thank you for inviting me.

Ross [00:00:55] Michael, sanctions, sanctions, sanctions is all we hear now. We’re sanctioning people. The West sanction people back to the Stone Age. What are the unintended consequences of sanctions?

Michael Hudson [00:01:05]Well, one is to serve very much like a protective tariff on the sanctioned country. For instance, when America made sanctions on European trade with Russia, Lithuania dutifully stopped exporting cheese to Russia. Well, the result is that Russia set up its own cheese’s sector, and now it’s self-sufficient in cheese.

If you sanction a country, you force it to become more self-reliant and across the board, from agriculture to dairy products to technology, Russia is forced to become more self-reliant and at the same time to depend much more on trade with China for the things that it is still not self-reliant in.

So America is bringing about exactly the opposite of what it intended. It’s hopeless to somehow isolate Russia and then be able to go after China without Russia. And instead, what it’s doing is integrating the Eurasian core, Russia and China, exactly the policy that Henry Kissinger warned against going all the way back to Mackinder a century ago that said, Eurasia is the world island, Russia and China could be the whole world center. That’s what the fight is all about.

Well, American sanctions are driving Russia and China together, and America has gone to China and said, Please don’t support Russia. It most recently, on Monday, March 14, Jake Sullivan came out and told China, we will sanction countries that break our sanctions against Russia. And basically, China said, fine. You know, we’ll just break off all the trade between East and West now and the East, Eurasia is pretty much self-sufficient. The West is not self-sufficient since it began to industrialize, and it’s heavily dependent on Russia for not only oil and gas, but palladium and many raw materials. So the sanctions are ending up driving a wedge between the European countries.

Ross [00:03:31] Don’t people who apply these sanctions think this through? Are they so short-sighted they don’t understand that these sanctions are going to build further capacity within Russia, push Russia further towards China, make that economic alliance concrete and, ultimately, you’re not going to be able to keep the lights on in in Europe? All the while underestimating the fact that from a food security point of view – take the U.K., for instance, a net importer of food – not appreciating the fact that, for instance, Russia/Ukraine, they create twenty five percent, a quarter, of all wheat annually. The estimation this year is one hundred and two million tons Russia and Ukraine, wheat. Don’t people realize that there’s going to be a massive knock on effect?

Michael Hudson [00:04:23]Yes, they do realize it. Yes, they’ve thought it all through. I worked with these people for more than 50 years.

Ross [00:04:31] Who are these people?

Michael Hudson [00:04:32]The neocons, basically, the people who are in charge of U.S. foreign policy? Victoria Nuland and her husband, Robert Kagan, the people that President Biden has appointed all around him, from Blinken to Sullivan and right down the line. They are basically urging people around the New American Century. They’re the people who said America can run the whole world and create its own reality.

And yes, they know that this is going to cause enormous problems for Germany. They know that not only will it block the energy that Germany and Italy and other countries in Europe need through their oil and gas, but also it’ll block the use of gas for fertilizer, upping their fertilizer production and decreasing their food production. They look at this and they say, How can America gain from all of this? There’s always a way of gaining what something looks to be bad. Well, one way they’ll gain is oil prices are going way up. And that benefits the United States whose foreign policy is based very largely on oil and gas. The oil industry controls most of the world’s oil trade, and that explains a lot of the US diplomacy. This is a fight to lock the world energy trade into control by U.S. companies, excluding not only Iran and Venezuela, but also excluding Russia.

Ross [00:06:16] So as Europe pushes towards more and more green and renewable energy and this for the Americans they must think it’s a dreadful scenario insofar as they can’t sell the oil as Europe becomes or wants to become more self-sufficient. So ultimately, and Britain net zero, whatever that means. But but going down the renewables path, going down the solar path takes America’s dependency or dependency on America out the game, doesn’t it?

Michael Hudson [00:06:49]This is exactly the point that the European public has not realized. While most of the European public wants to prevent global warming and prevent  carbon into the atmosphere, U.S. foreign policy is based on increasing, and even accelerating, global warming, accelerating carbon emissions because that’s the oil trade. Suppose that Europe got its way. Suppose if the Greens got what they wanted and Germany and Europe were completely dependent on solar energy panels, on wind energy and to some extent, on nuclear power, perhaps? Well, if they were completely self-sufficient in energy without oil or gas or coal, America would lose the primary lever. It has over the ability to turn off the power and electricity and oil of any country that didn’t follow U.S. diplomatic direction.

Ross [00:07:48] So when we take your analysis here and we think about how the sanctions are going to build capacity, push Russia and China together, when we start to look at sort of piggy in the middle, if you like the EU, when we’re thinking about America, the EU has had a sort of abusive relationship with the Americans for quite some time now, hasn’t it?

Michael Hudson [00:08:06]Well, that’s true in the sense that EU foreign policy has basically been turned over to NATO. So instead of European voters and politicians making their policy, they’ve relinquished European foreign policy to NATO, which is really an arm of the US military. So yes, Europe has had a decent relationship with the United States diplomatically by saying yes, yes, please or yes, thank you by not being independent. Of course, if it were independent, the relationship would not be so friendly and decent.

Ross [00:08:46] So for countries that are net importers of food, need to keep the lights on, need heating and need cheap oil. How does this pan out? What does it look like for the UK? What does it look like for the EU?

Michael Hudson [00:08:59]Well, Vice President, Kamala Harris the other day said to Americans, Yes, life is going to be much more expensive. Our oil prices are going up and squeezing families. But think of the poor Ukrainian babies that we’re saving. So take it on the chin for the Ukrainian babies.

So basically the United States is presenting horror stories of the Ukraine and saying, if you don’t willingly suffer now by isolating Russia, then Russia is going to roll over you with tanks just like it rolled over Central Europe after World War Two. I mean, it’s waving the flag of Russian aggression, as if Russia or any country in today’s world has an army that’s able to invade any other industrial nation. All military can do today of any country is bomb and kill other populations and industrial centers. No nation is able to occupy or rollover any industrial country.

And the United States keeps trying to promote this mythology that we’re still in the world of 1945. And that world ended really with the Vietnam War when the military draught ended. And no country is able to have a military draught to raise the army with necessary to fight to invade. Russia can’t do it any more than Europe or the United States could do it. So all the United States can do is wave warnings about how awful Russia is and somehow convince Europe to follow the US position. But most of all, it doesn’t really have to. Europe doesn’t really have a voice, and this is what the complaint by Putin and Foreign Secretary Lavrov have been saying. They say that Europe is just following the United States and it doesn’t matter what the European people want or what European politicians want. The United States is so deeply in control that they really don’t have much of a choice.

Ross [00:11:15] When does the consumer start to feel this? When does the European or British consumer start to feel the pinch when these sanctions are enacted? And what does that look like?

Michael Hudson [00:11:25]Well, it depends on how fast the sanctions work. The United States said Well, in another year and a half, we’ll be able to provide Europe with liquefied natural gas. Well, the problem is, first of all, they’re not the ports to handle the liquefied natural gas to go into Europe. Secondly, there are not enough ships and tankers to carry all of this gas to Europe. So unless there are very warm winters, Europe is not going to have a very easy time for the next few years.

And that’s only for oil and gas. It’s dependent on raw materials that Russia produces. For instance, palladium is necessary for catalytic converters. Titanium is necessary to make the screws that are especially used on aeroplanes that are strong enough not to buckle and break when winds go up and down and when they’re full. Russia even produces the neon and the crypton that are necessary for making some kind of electronic uses and also for many components that go into computers and information technology. There’s a whole range of exports that Europe is highly dependent on, and the United States has provided Putin with a whole list of these exports, saying, Well, OK, we’re going to fight against Europe buying your oil and gas but you can certainly sell us your heavy oil that we need since we’re not buying it from Venezuela. We certainly need the following list of critical materials that we need, like helium and crypton. These are our pressure points. Please don’t press on them. Well, you can imagine what Putin and his advisers are saying. Thank you for giving us this list of the pressure points that you’re exempting from the trade sanctions. I think if you really want a break in the unilateral, unipolar world, I think we should break now and see whether you really want to get along without trading.

Ross [00:13:51] Michael Hudson, welcome back, second half, Renegade Inc. Wonderful to have you. In that first half we followed the money, if you like. We talked about sanctions and the unintended consequences. I just want to pull back a little further if we can and just talk about the sort of tectonic shifts that are going on in the world. I spoke to somebody from Russia recently and what he said was very straightforward. He said, now what we have to do is begin to learn to live without the West. Do you think that that sentiment is proliferating across Russia now? Is that the mindset?

Michael Hudson [00:14:22]Well, if you read President Putin’s speeches, that’s exactly what’s happening. And Secretary Lavrov has voiced exactly the same feeling. There’s almost a disgust with the West and a feeling from Putin, Lavrov and the other Russian spokesmen, how could we ever have hoped to have an integration with Europe after 1991? Europe really was not on our side at all, and we didn’t realize that Europe is really part of the U.S. diplomatic sphere. It’s like all of Europe is now backing the attack on Russia. The best to do is reorient our economy towards China, Asia and Eurasia and become our own self-sufficient, independent center.

Ross [00:15:15] De-dollarisation and the amassing of plenty of gold by both the Russians and the Chinese. Just talk us through that.

Michael Hudson [00:15:21]Well, Ross, you asked in the first half of this interview how has American sanctions worked against it? I should have mentioned what you just mentioned, the dollar. The United States just grabbed all of Russia’s foreign exchange reserves, just as England a few months ago grabbed all of Venezuela’s gold that was held in the Bank of England when Venezuela tried to spend this gold on buying medical supplies to cope with the COVID virus.

So basically, the United States have said, if any foreign country holds its reserves in the United States or accounts in U.S. banks. If a country in the global south tries to pay its foreign debt by holding its reserves in US banks in order to be the paying agent on the interest on its foreign debt. And if that foreign country does something we don’t like, like trade with Russia or permit more labour unionization or try to become independent in food, we’re just going to do what we did to Venezuela, what we did to Iran when we grabbed its foreign exchange reserves or what we did to Russia. And that means that other countries all of a sudden see what they thought was their flight to security, what they thought was their most secure savings, their holdings in U.S. banks, US treasury bill, all of a sudden, is holding them hostage and is a high risk.

Even the Financial Times of London has been writing about this, saying, how can the United States that was getting a free ride off the dollar standard for the last 50 years, ever since 1971, when foreign countries held dollars instead of gold and basically holding dollars means you buy U.S. Treasury bonds to finance the US budget deficit and the balance of payments deficit.

How can the United States kill the goose that’s giving it the free ride? Well, the answer is that other countries can only move into gold and there’s an alternative to the dollar because that’s something that all the countries of the world have agreed upon is an asset, not a liability. If you hold any foreign currency, that currency is a liability of a foreign country, and if you hold gold, it’s a pure asset. There’s no country that can cancel it, the Americans can’t cancel Russia’s gold supply that’s held in Russia, although it can grab Russian gold supply if it were to hold it in the New York Federal Reserve Bank or the Bank of England. So other countries are not only moving to gold, Germany is bringing its gold back from New York, the Federal Reserve, in aeroplanes back to Germany, so it’ll have its own gold just in case German politicians would do something the United States didn’t like and the United States would simply grab Germany’s gold. The United States sanctions, and it’s especially it’s grabbing on foreign reserve, has started a war that is dividing the world between the West and Eurasia.

Ross [00:18:40] A technical part to all of this because let’s face it, it is an information war and it’s also an economic war. Is it the FIRE sector that you point out – the financial, insurance and real estate sector. Is it that they want to continue the exorbitant privilege of credit creation, because ultimately, if you think about gold, there’s no counterparty risk. Gold is gold and it has been for millennia. Far from being a barbarous relic, by the way now, people are starting to realize the intrinsic value, especially as crypto falls apart. Can you just talk a little bit about this, the FIRE sector wanting the exorbitant privilege of creating credit?

Michael Hudson [00:19:19]This is really what the new world division and global fracture is all about. You’re right, Ross. If you look at after World War One, the American fight against Soviet communism, was basically a fight of industrial capitalism against the threat of socialism. But after 1991, and especially in the last two decades, America deindustrialized.

So the fight is not by industrial capitalism against countries pushing their labour up. It’s a fight of neoliberalism against industrial capitalism or socialism abroad. It’s against industrial capitalism evolving into socialism. It’s a belief that, well, now that America’s be industrialized, how is it going to control the world economy? Well, it’ll control it through a financial means by being the creditor and foreign countries debt payments to America will enable it to make its military payments abroad and finance its trade deficit. But also, America’s purchase of key natural resources will give it natural resources when its purchase of takeover of real estate is going to essentially make the United States the landlord class and monopoly class, that mediaeval Europe had to hold the rest of the population in serfdom. That basically is the American strategy of neoliberalism fighting against countries that reject privatization and financialization of their economy, and specifically financialization under the control of U.S. banks, U.S. private capital and allied satellite banks and capital from England or France or Germany. This is exactly the fight. Will banking and finance control the world economy or will other countries try to build up their own economies through labour and tangible capital formation?

Ross [00:21:27] Where do you stand on that? And I’m only asking you to predict the future, Michael. How do you think this plays out? Because the way you’ve depicted it is the rent seekers, the neoliberal rent seekers on one hand, and there are value creators on the other. And by the way, those two things don’t sit very well together, as we know. How does that play out?

Michael Hudson [00:21:51]Even though the United States is the largest debtor economy in the world, it’s a creditor vis-a-vis the global south and other countries and it uses its creditor position to take over their natural resources, real estate, oil and gas, mineral rights and public utilities and natural monopolies and that are being privatized in government infrastructure. It’s becoming basically the landlord monopoly class of the entire world. That’s the U.S. strategy, and that’s the key to why the world is fracturing globally. And in the past, the global south countries were unable to fight against this tendency in the 70s and 80s with the Vendome conference on. But now that China and Russia threatened to be a self-sufficient core in Eurasia, this is the great threat to the American dream of becoming a landlord and financier of the world.

Ross [00:22:50] How do you think this pans out?

Michael Hudson [00:22:52]Well, the question is whether the United States is if we can control the world, who wants to live in a world like that, let’s blow it up. The question is whether the United States will actually go to war. The only lever that it has left is to drop bombs and to destroy and make the world look like Ukraine.

So from the U.S. point of view, Europe’s future and Eurasia’s future is the Ukraine. Look at what we will do to you if you don’t follow our policy. America has just moved al Qaeda very heavily in the Ukraine to sort of repeat in Ukraine and Europe what it was doing in Syria and Libya. And the United States says this is what we can do. What are you going to do about it? Do you really want to fight.

But the rest of the world, certainly China and Russia says, Well, we’re ready to fight. So there is no telling what what you. And it comes down to personalities. Putin has said, well, do we really want to live in a world without Russia? If the United States is to attack us, we might as well end the world. The United States says, Do we really want to live in a world that we can’t control? If we’re not completely in control, we feel very insecure and we’re going to blow up the world.

So you have this countervailing position in a world where all the arms control has been dismantled by the United States in the last few years. The United States has withdrawn from all of the agreements that Russia and China have tried to promote. And Europe is standing by and apparently is willing to be the sacrificial lamb in all of this as Ukraine is being the sacrificial lamb.

So the United States and Russia say, let’s fight to the last European. And Russia initially didn’t want that because it was hoping that Europe and Russia would have a mutual gain in trade and investment relationships. But now it doesn’t feel that way. And there may be a proxy war between the United States over the European economy, not necessarily bombing Europe, but trade sanctions, energy sanctions, the kind of disruption that Europe is going to be seeing in the next year is if it loses Russian oil and gas and minerals and also, I think Chinese exports.

Ross [00:25:25] Is there a moment where cooler heads prevail and suddenly the West and other places realize that they’re dependent from a food security point of view, from an energy security point of view that we are dependent? And is there a moment at that point that you can thaw a frozen conflict by saying, actually, if we both meet, we just take a step toward each other, actually, we can do something in a collaborative way? Now I get what you’ve said throughout the rest of the program, and I give this a percentage possibility of about three percent, but isn’t there a strategy to say, actually, we’ve had all the grandstanding, we’ve had all the brinksmanship, we should now sit around the table and try and work something out?

Michael Hudson [00:26:03]I don’t see any cooler heads in the United States. The surprising thing is that here it’s the right wing channel, the Republican Fox Channel, is the only channel that’s taking the anti-war stand and is saying we shouldn’t be at war in Ukraine. It’s the only channel that’s talking about here is how Russia sees the world. Do we really want to take a one sided perspective or do we want to see the actual dynamics at work? So it was the Republicans and the right wing that is now primarily against the NATO war in the Ukraine. The left wing seems to be all for it, but the left wing of the Democratic Party is in office and I don’t see any cooler heads in the Democratic Party at all. And I’ve known many of these people for many decades, and they are willing to go to war for a death. There are still back in the world of World War Two when the fight was against the Nazis and anti-Semitism. They’re still living in a kind of mythology world, not in the real world. And the thought that the world can come to an end either doesn’t have a reality to them or is Herman Cain said, Well, somebody is going to survive.

Ross [00:27:29] Michael Hudson always a pleasure, a great insight. And, you know, it’s just refreshing to hear such cut through. Thank you very much for your time.

Michael Hudson [00:27:38]Well, thank you very much for having me, Ross.

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  1. Louis Fyne

    —So it was the Republicans and the right wing that is now primarily against the NATO war in the Ukraine. —

    No. Only Tucker Carlson and MAGA crowd is neutral to anti-war. DC GOP (ROmney, Lindsay Graham, Adam Kinzinger) are just as chicken-hawkish as DC Dems.

    Mitt Romney will get us all nuked with help from Hillary Clinton.

      1. John Steinbach

        I was thinking yesterday that Tucker Carlson & the American Conservative are relative voices of sanity in a sea of madness. And, I’m a life-long commie.

        1. digi_owl

          The venn diagram of interests overlap from time to time.

          The left back in the day gained political ground because they put economic issues ahead of social issues. As in, their focus was on wages and work hours rather than who could use what toilet. Thus they gained votes from both liberal and conservative social voters.

          But as neoliberals rose in the ranks of the would be left in the 80s onwards, priorities shifted. And that resulted in the worker vote moving rightwards. Because the right was seen, rightly or wrongly, to still talk about economic issues. Problem being that they do so as a proxy for xenophobia and such (dirty foreigners coming for your hard earned jobs etc).

          Thus Tucker et al overlap with the workers left when they highlight the economic woes of the workers in the current globalist economy. But the problem comes when they voice their solutions.

          1. KD

            Not sure. The working class has woken up and realized however bad the bosses are, the PMC and their parasitic army of “caring professionals” from the Axis of Kindness are worse. “At least I can still smoke in the my car” as the bumper sticker says, and the bosses aren’t trying to groom my children at school or teaching them Rwandan social justice. Fox News, Tucker Carlson, and the rest of the “populists” still represent the interests of the bosses.

          2. cobo

            The former democrat worked for both economic and social issues: unions, anti-war, free speech, civil rights, ERA… The former democrat risked arrest, injury and even death to secure these rights for themselves and others. They risked that for an “inclusive” gender, color, creed society. The new democrat risks nothing, promotes division and tries to cancel people and ideas then currently not fashionable – and don’t try to kid me about the ersatz BLM/Antia.

        2. Carolinian

          It’s interesting that Sputnik keeps mentioning Tucker Carlson. It’s as though the Russians sense an American public opinion strain that the bubble Dems in the White House pretend to ignore.

          And while Carlson is not Fox, his show is their ratings champion. Clearly somebody is watching.

        3. Safety First

          This is actually nothing new. Back in 1999, when Clinton was bombing Serbia, Newt Freaking Gingrich was doing the weekly talk show circuit urging restraint and peace and love and togetherness and such. He did not mean it then, and Tucker & Co. do not mean it now, they are simply playing the old pre-election game of I’m-against-anything-you-are-for, because they are terrified of giving Biden a rally around the flag boost just before the midterm election.

          They do this domestically as well. Remember them killing Obama’s Grand Bargain in 2011? Railing against Obamacare before the 2010 midterms, never mind it being a Republican plan from 1994? Calling cap-and-trade “socialist” when Obama brought it up, even though Cheney’s 2001 task force was the one that had introduced it? The GOP, for the past 25-30 years, has been LASER focussed on taking the next election even if that means yo-yoing on their public policy positions. [Incidentally, I am presently reading a biography of Joe McCarthy where, it seems, he pursued an identical sort of political strategy in his Senate race…]

        4. Kurt

          Relative voices of sanity? Tell that to the Chinese, who people like Tucker Carlson & and the American conservative are all for destroying. The Carlson’s of the world use their ‘ anti-imperialist ” stance on Russia as an obfuscation because their ultimate goal, which is completely in line with the Democrats, is the destruction of China. You call yourself a lifelong Commie but I think you’re fooling yourself. You are getting in bed with ultra-nationalists when you call them a voice of sanity. What you are, is a lifelong Stalinist. Communism died with Lenin because it was strong armed away from Trotsky after Lenin’s death. This mess we find ourselves in today should be a lesson to all the working class to heed the warnings of Trotsky to unite on a global scale to eradicate capitalism and bring about a socialist society that can live up to the ideal of: of, for, and by the people.

    1. Carolinian

      My Senator Lindsey is a clown. Of course that doesn’t mean Michelle isn’t going to hug him.

      Personally I think the nuclear war talk is overdone and I’ve done some of it myself. As for the Dems, they may not be afraid of Putin but they seem to be scared to death of the Deplorables and wrecking our economy and sending gas prices soaring is unlikely to sweeten the mood of the voting public. Guess we’ll see how this hashes out come November but the Repubs are already campaigning at gas stations. Plus nuclear war depends on a willing military. I think Biden doesn’t have nearly as much room to maneuver as people think and Putin is going to get his way and the Dems are going to fume.

    2. WJ

      I believe that Romney has financial interests/history in Ukraine.

      The political alignments are interesting. By far the most consistent and often best informed opposition to US involvement in Ukraine has come from the niche principled libertarian set–the same group that has long dominated antiwar.com. Scott Horton, Luongo, etc. I have learned from researching this group that some libertarians are actually in favor of strong unionization as part of the “invisible hand.” I believe these are in the minority. I continue to think that, in practice, mainstream libertarian organizations function as an ideological buttress to the corporate state. But I have to admit that this is not true of all individual libertarians.

      Second to libertarians on the right are the paleo-cons (what the NY Times now calls the National Conservatives). These folks are generally a bit more populist in economic affairs, which is mixed unfortunately with a rhetoric of nativism. They tend to be realist in foreign policy. They tend to be a bit “anticommunist” in rhetoric (another issue for me) and are focused more on the evils of China. Tucker Carlson, Jack Posobiec, Pedro Gonzalez all fall within this set if I am not mistaken.

      Then come the anti-imperialists on the left. MofA, Grayzone, Dore, etc. These folks tend to be left populist–with a focus on the MIC and financizliation of the economy and the overall corruption of the elites. They tend, I think, to be “liberal” in their own personal beliefs regarding gender and sex, but these issues are not their focus.

      Apart from these three groups you have mainstream Dems, Republicans, most of whom are neoliberals and neonconservatives in some combination. They believe in “our institutions” and ‘our democracy” etc. They identify with existing elite power structures. They represent the dominant cultural class at the moment–the PMCs. Their ideology is explicitly reflected in most big corporate PR campaigns–Amazon, Nike, ESPN, etc.
      They remain fully in charge. Unfortunately, they have seduced a large number of (what were in 2016) left populists to their ranks, accomplished in large part through Russia gate. Their aim, as best I can tell, is to kill us all as soon as possible.

      1. Akash

        An excellent and erudite synopsis WJ of the primary contending camps in the American political/economic discourse. Thanks. Not sure how to euthanize the PMC set before they ‘kill us all as soon as possible’? The latter seems to me the crux of the issue. Although Mother Nature might end up deciding the issue irrespective of our contending concerns.

  2. digi_owl

    There are times one may ponder if the likes of Venezuela was rigged to fail no matter how competent Chavez et all had been.

    This in that the nation needed to import just about everything to sustain the domestic economy, and their major exports buyer was USA.

    Thus if ever they got a leadership DC didn’t like, USA only needed to find an excuse to curtail buying said export in order to send the nation spiraling the drain. And once that process had begun, DC could then declare “humanitarian” sanctions to accelerate the process.

      1. NotTimothyGeithner

        To follow on your other comment, the current problem for the West is Moscow isn’t run by the paranoid Politburo and China isn’t a wreck or the Middle Kingdom anymore. Countries that were too small to function in the modern world without being obsequious to DC can shop around. Then countries like Brazil have models to follow without the sword of damocles hanging over them.

        The Monroe Doctrine included a bit, the important part, that the US would guarantee European corporate interests.

    1. KD

      Perhaps, but it probably would have done better if Chavez had invested some of that money into capex instead of handing it all out to the peasants. Heck, in proper communism, you are supposed to sell all the spare food surplus to obtain foreign capital and try to make sure the right people starve to death.

    2. lance ringquist

      remember, under free trade whats mine is mine, whats yours is mine. and its taken a couple centuries of of grooming leaderships, indoctrinating them, propagandizing against governing for your own people, country, labor, raw materials.

      and if economic power and pressure does not work, well nafta billy clinton showed the way with the dismantling of yugoslavia.

      ian welsh wrote about this more than once,


      “What a country needs it must either be able to produce, or have product it knows it can sell to someone who can produce what it needs, and who is a reliable partner. (No Western country is a reliable partner to an actual left wing revolutionary government.)”

      there was a reason why nafta billy clinton used the gun to make countries specialize and turn away from food production, let alone anything else but what the free trading oligarchs wanted.

      the average american is going to be stunned what they are going to go without, in the land of plenty.

      MR. HUDSON, you keep slamming the nafta democrats, many people would never give the GOP a second, let alone a first look. nafta billy clinton made them contenders to govern since 1993, they never had a chance again till nafta billy came along.

  3. flora

    Great interview. Describing the current standoff as a fight between RU (and maybe China) and the West’s neoliberals sounds right. I’ve also read it described as a standoff between RU nationalists and the Davos globalists.

    1. digi_owl

      You got me thinking that the Davos globalists are effectively a cover for the US empire.

      As in, neoliberal globalism is effectively turning the world into banana republics to the benefit of the City of London and Wall Street.

      Davos is the meeting place of the stewards of the absentee lords. Or effectively the PMCs dreaming themselves kings.

  4. Mr. Phips

    Lemmings, just like Lemmings walking towards the precipice are the people in the Western sphere of influence. Amazing. What a spectacle we are witnessing.

  5. Martin Oline

    This is a great summery of where we are today. When Jimmy Carter appointed Zbignew Brzezinski his national security advisor in 1977 I was disappointed due to the man’s hawkish views. Wiki informs me he was a primary force behind the forming of the Trilateral Commission and “in the 1990’s he formulated the strategic case for buttressing the independent statehood of Ukraine, partially as a means to prevent a resurgence of the Russian Empire.” He likely developed the careers of many neocons who are now making policy. His daughter Mika, a co-anchor on MSNBC’s Morning Joe, has said her job is not to report the news but to “shape opinions.”
    I worry about the sanity of Joseph Biden. I was in Iowa during the primary season of 2020 and several times he challenged people in the audience to either ‘step outside’ to fight or have a push-up contest. These tantrums were not always covered by the national media-serf networks. Pat Lang has recounted several times about how Joe loses his cool at the drop of a hat. It’s not that he is loosely wrapped: the wrapping has fallen off completely. Some think there is a 20% chance of nuclear war. Playing Russian roulette gives you a chance of 16% each time. Where is the sanity in this world?

    1. digi_owl

      I can’t help wonder if much of US policy, and political thinking, has been formed after WW1 by refugees, and their descendants, from the communist takeover.

      Once you start to look into various people’s background, you find yourself wondering if they are biased regarding certain issues and thus should not be consulted as an adviser.

      Similarly i wonder how much of the current coverage of Ukraine by English language media is trustworthy, as it seems to rely too much on local freelancers that may carry a grudge.

      1. BillS

        Macchiavelli on using exiles as advisors on policy:

        “It ought to be considered, therefore, how vain are the faith and promises of those who find themselves deprived of their country. For, as to their faith, it has to be borne in mind that anytime they can return to their country by other means than yours, they will leave you and look to the other, notwithstanding whatever promises they had made you. As to their vain hopes and promises, such is the extreme desire in them to return home, that they naturally believe many things that are false and add many others by art, so that between those they believe and those they say they believe, they fill you with hope, so that relying on them you will incur expenses in vain, or you undertake an enterprise in which you ruin yourself….. A Prince, therefore, ought to go slowly in undertaking an enterprise upon the representations of an exile, for most of the times he will be left either with shame or very grave injury.” Discourses on Livy, Book 2, Chapter 31.

        As I’ve said in the past, no one reads the classics anymore.

        1. NotTimothyGeithner

          Yeah, but Machiavelli was like really old. I bet he is still using an IPhone 8. Our elites are what history has been leading to. We are blessed they don’t kill us faster.

          Some say there is nothing new under the sun but our glorious elites shine with the luminosity of a 1000 suns eternally.

          Even if they had read Machiavelli or selected bits, they wouldn’t see how it applies to them. These people can use a phone and make a vehicle appear to drive them places called an Uber. Wow! What an age!

      2. lance ringquist

        wodrew wilson was absolutely hysterical that the communists won, and invaded russia on the atlantic side, and the pacific side.

    2. John Wright

      When one looks at Joe Biden’s career, helping to put Clarence Thomas on the SC, no bankruptcy allowed for student debt, voting for every military adventure promoted by George W. Bush, and allowing Hunter Biden’s Ukrainian grift, it is difficult to see that the earlier “sane” Joe Biden was good or courageous.

      I was encouraged when he pulled out of Afghanistan, but then he segued to the Ukrainian adventure.

      Ronald Reagan had astrologer Joan Quigley advise him.

      It is harrowing to consider. but in my view, given Biden’s performance, maybe the world would be well served by bringing in some astrologers to advise him.

      Also, perhaps there is a wise and benevolent Jill Biden who will function as Joe’s Nancy Reagan guiding him.

      1. flora

        an aside: given the recent MSM negative shift in reporting on Kamala, I remember before “they” (whoever “they” is) ousted Nixon they first had to oust Agnew so he wouldn’t become president. Agnew was replaced by Ford. I wonder if the current powers that be are thinking of replacing B before 2024 but need to replace Kamala first with someone who’d not generate so much controversy. B’s approval numbers are dismal and sinking.* My 2 cents.


        1. orlbucfan

          Spiro Agnew was a crook and stunk up the state of Maryland as governor. I lived there and recall all too well. He and Tricky Dick were a perfect match. Thanks for the interview.

          1. Martin Oline

            Nixon was supposed to have said Agnew was his insurance against assassination. I wonder if he always had the goods on Agnew and, in search of a pardon, Ford was the only one who was willing to do it. The timing of Agnew’s resignation seemed peculiar.

        2. KD

          Perhaps, but have you noticed that Biden gives Kamala Harris all the good jobs like dealing with the Mexican Border or handling the Ukraine cluster. Her job appears to be to go into unwinnable situations and then get broadsided with the inevitable flack that results.

          1. Michael Hudson

            I remember being told some anecdote, I think of Charles I telling Charles II; ‘Do you think they’ll kill me, to get YOU?”

        3. ejf

          now THAT would be a perfect board game. call it “Agnew Again” or “Repeat Offender” or “Vice… ” something. There have to be random felonious offenses for whoever plays VP, each would produce some sort of poll rating for the Party Bigwigs to figure out (you need a minimum number of 2 Bigwigs). Then the players would have to produce a Reasonable Replacement role who’d be a smiling puppet of the whoever plays Cheney/Rumsfeld.

  6. Carla

    “the left wing of the Democratic party is in office”


    Even supposing there were a left wing of the Democratic party, this would not be anything close to a true statement. Since there is no such thing, it’s nonsense.

    1. pebird

      Left wing is a label to describe the more self-styled “progressive” wing of the party, as opposed to the smaller “centrist” wing.

      Don’t think it’s meant to imply Emma Goldman or Trotsky.

      1. KD

        The “centrists” are just the corporate lobbyists, and the “progressives” are a bunch of narcissists making instagram posts and selling merch, and their efforts, when they actually succeed, mainly results in make-work jobs for liberal arts graduates, as if the world really needed more “therapeutic managerial” deadwood and some more overpriced certifications.

      2. hamstak

        I like “woke wing”. That might be a little harsh, but I don’t think it is far off the mark.

    2. John

      Not the Platonic ideal of a left wing, but left relative to what lies to its right. No matter where you move the center there is always a left and a right. The democratic party of today is more akin to Eisenhower republicans than to the democratic party as it was with the complication of deindustrialization and the takeover of the government by the finance sector, which seems hell bent on recreating some sort of feudalistic structure.

    3. jefemt

      All six of them?

      I thought it was President Manchin and Veep Sinnema running the show, with Mitt shaking his pom-poms?

  7. Paul Whittaker

    My understandings of the lemmings story, was Walt paying the locals $4 a head to gather them, and his son tossing them off the cliff in the “nature movie”. Sort of typical America.

  8. The Rev Kev

    Great interview and I am still trying to put the pieces together. I think that the term Neocons may need a qualification here as this is an outgrowth – in my opinion – of what has been called American exceptionalism (Obama – ‘I believe in American exceptionalism with every fiber of my being.’) and a desire to extend American rule into the rest of the 21st century, hence the attempted grabbing of oil resources around the world as that is what our civilizations runs off. But it does not explain everything that we see.

    My point is this. Perhaps it is not so much the neocons here but a set of people that have a neocon outlook. And here I am thinking of the class that composes the FIRE sector. Consider – it is the FIRE sector that rules America and turned it into a rentier economy and now they are challenging Russia and China which are industrialized, capitalist countries that have a wealth of commodities. So what we are seeing is a fight to the death between these two systems. FIRE vs old-style Capitalism.

    Consider also – the weapons used by the west have been financial in nature such as sanctions, asset seizure, blockades, etc. and you would expect these to be the primary weapons of the FIRE sector. It’s all they really know as calling out the Pentagon is not an option here. Russia, which is nearly an autarky with vital commodities and a deep industrial base, are saying we don’t care. We can last far longer than you can. We refuse to be assimilated. Resistance is not useless.

    And this is where Europe comes in. It made no sense for Europe to commit economic seppeku but it you consider the fact that the people really running the EU are aligned with the FIRE sector, then this makes more sense. Of course as economic chaos hits Europe leading to political chaos, they may have to reconsider. Resistance riots are far more common in Europe than other countries and you can only send in riot police so many times until things break down. And trying to challenge Russia with NATO won’t work out either. Interesting times.

    1. digi_owl

      In the latter volumes of Das Kapital, Marx supposedly mused that when capitalism entered a crisis it would benefit industrial capitalists to side with their workers against finance. But he observed than when did so, it was invariably far too late.

      1. John

        I am having great difficulty in separating the idea of “asset seizure” from that of “theft.” Could someone enlighten me, please?

        1. The Rev Kev

          I can help with that and it comes down to one sentence – ‘It’s OK when we do it.’

        2. hunkerdown

          Does it reproduce the prevailing order of society (as an entity that unites its constituents but is independent of and styles itself superior to them) wishes it to be? If so, asset seizure; if not, theft. It really is that simple.

    2. hamstak

      Here’s a question: would (the rhetorical) you not consider phrases such as “American exceptionalism” and “indispensable nation” to be rather ultranationalist in character? I do. Amerika über alles!

  9. polar donkey

    I regret going to the college I did. Got a degree in International Studies in mid-90’s. The department had standard neoliberal and neocon perspective. It didn’t sound right then to me. I should have gone to UMKC and taken classes from Professor Hudson.

    1. Just an Analog Girl

      I did go to graduate school at UMKC (MBA – ha, ha, ha). Unfortunately, Professor Hudson was not there at the time (nor Stephanie Kelton, nor Bill Black, nor Randy Wray) Sigh.

  10. Ashburn

    Agreed. Today’s Democratic Party is simply different branding of the neocon and neoliberal Uniparty. Anyone posing as a ‘Left Democrat’ is engaged in purely performative theatrics with zero substance. Note that not a single Democrat in Congress that I can tell has called out the Biden, Blinken, Nuland and Sullivan cabal for provoking the disaster in Ukraine.

  11. Martin Oline

    Putin has decided to play chess with the West. This was announced today:
    “I have decided to implement in the shortest possible time a set of measures to change the payments for – yes let’s start with this – for our natural gas supplied to the so-called unfriendly countries in Russian rubles, that is to stop using all compromised currencies for transactions,” the Russian president said. “It doesn’t make sense to deliver our goods to the EU and the US and get paid in dollars and euros,” he added.
    I wonder if Michael Hudson has anything to say about this development?

    1. Eclair

      I read this on my morning check-in with Moon of Alabama; not good having a major ‘oh shoot’ moment when I was still working on my first cup of tea.

      MofA also reported on the mutual support agreement between China and Russia, the text of which was released at the beginning of the Winter Olympics. And which was pretty much ignored by Western Media (except for NC.) It was another ‘oh shoot’ moment.

    2. Michael Hudson

      Unless they go through China, or send a planeload of gold (to be tested for purity), there’s going to be an interruption of trade — shortages, etc.
      Thank heavens that Germans are willing to let their water pipes burst when their gas is off, and their farmers can’t get gas fertilizer. It may assuage their guilt for losing World Wars I and II. they’re very obedient and dependent on the US.
      The rouble is UP now. the world is fracturing in two — the Neanderthal Europe-North America, and the non-whites, as one commentator put it.
      Where are (and who is) the ruling class?

  12. Steven Greenberg

    I am no longer placing any bets on who has a better prediction of the future. We are just going to have to watch it play out.

  13. JoeC100

    Regarding the risk of nuclear war, a few facts may be relevant:

    1. Russia has strategic weapons way beyond anything the US has. This should be quite clearly recognized by top military officials. So such a war may not play out quite how most observers think. One example is hypersonic strategic missiles. The US isn trying to develop these but so far has just had a bunch of early technology failures. In contrast, Russia has strategic hypersonic missiles in production and deployment. Last week they used one to take out an ammunition depot in Ukraine – basically I assume to make the point that their strategic hypersonic weapons are REAL.

    It is well worth reading all of Andrei Martyanov’s three books on Russian (vs. US) military capabilities to see how large the imbalance is. It may well be that Russia could drop an inert bomb across the street from the white house to “send a message” and we could not detect it. And if somehow we did detect it, we could not shoot it down.

    Russia also has an as yet untested tsunami torpedo which could cause enormous coastal damage short of a nuclear exchange. A demonstration on an uninhabited island somewhere or a relatively undeveloped US coastline (Alaska?) could be quite sobering.

    1. Paradan

      A demonstration of that weapon would be a radio-logical disaster and turn much of the world against Russia.

  14. David in Santa Cruz

    This is a very good discussion — I don’t think that it can be understated how much influence Eastern European exiles have had over a neo-con foreign policy that seems so focused on re-litigating the borders decided at Potsdam in 1945 and on “Ukraine” in particular.

    Reading TASS summaries of President Putin’s speeches led me to dig a little further. I learned about the “Dnipropetrovsk Mafia” who stepped into a post-war power vacuum after Stalin’s Great Purge and the Nazis shooting commissars on sight. You may have heard of them: Nikita Khrushchev, Leonid Brezhnev, and Konstantin Chernenko were a close-knit group of Ukrainians whose power-base was in Dnipro.

    During the 1950’s, this “Dnipropetrovsk Mafia” appear to have convinced Stalin to annex huge swathes of historic Russian, Polish, Hungarian, and Romanian people and territory into a vastly expanded “Ukrainian” SSR — this is what Putin is complaining about when he questions the legitimacy of the 1991 borders of this “Greater Ukraine” that had been created during the 1950’s as a power-base by Ukrainian CPSU insiders.

    Zbigniew Brezezinski, traced his family origins to a part of historic Galicia that is now part of “Ukraine.” Victoria Nuland and Antony Blinken trace their ancestry to “Ukraine” as well. Volodymyr Zelenskyy happens to hail from the Dnipropetrovsk oblast…

    Is it any wonder that U.S. Neo-cons are so vehemently anti-Russian and see “Greater Ukraine” as a way to put Russia in check? Is it any wonder that the post-communist Russian government has such a problem with that?

  15. Tom Stone

    It’s always about the people.
    Putin and Russia will not back down, they have a strong hand and know it.
    They also know that the timing right now is as good as it is going to get.
    Putin and his advisers are highly competent and determined, if pushed hard and far enough they will go Nuclear.

    Biden…appears to have developed hemorrhoids on his brain due to prolonged cranio rectal impaction.
    He did not consult with the Fed, the Treasury, the commerce department or the DoD before committing an act of War against Russia.
    He most likely did consult with Blinken, Kagan, Nuland and Hillary Clinton.
    It has been obvious for several years that Biden is prone to irrational angry outbursts ( Tantrums) and that he has experienced significant cognitive deficits.
    And he wasn’t bright to begin with.
    And then we have the crew of Blinken,Kagan etc…
    Arrogance,Sociopathy, and incompetence define them,not rationality or good sense.
    When I ask myself if they are stupid and arrogant enough to start a Nuclear war the answer is an unequivocal yes.
    They can not understand men like Putin or Lavrov because they can not concieve that there might be such a thing as a patriot or an honorable man.
    ALL of them would sell out their country for a pretty title and enough $.

    I once classified scumbags in 3 major categories.

    1) People who would sell their mothers for cash on the barrelhead at market price.

    2) People who would sell their mothers for a nickel,cash.

    3) And people who would sell their mothers for a nickel and take a post dated check.

  16. H. Alexander Ivey

    Sorry to ask for a clarification of Dr Hudson, but what is meant by “the Vendome conference”?

    Google failed me…

  17. andrea casalotti

    Yves claims there is a McCarthyite atmosphere in the West.
    Yet she is able to publish this egregious piece of disinformation (“Russia cannot invade”, “Europe is now backing the attack on Russia.”). If she attempted to publish an opposite piece in Russia, she will probably spend a decade in jail.
    People, we all denounce past violence committed by the West. However to support an even more violent bully, just because he is the enemy of your enemy is asinine.

    1. andrea casalotti

      Sorry; should have been: “we all denounce past and present violence committed by the West”

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